2023 (10) TMI 649 - AT - Income Tax

Addition u/s 69C - Unexplained cash entries - During the course of search in the India Bulls Group, a Cash Transaction Record (CTR) in the form of loosely maintained cash book in Excel format by an employee - assessee submitted that the onus is on the assessing officer to prove that the impugned addition has not been accounted in the books of accounts of the assessee - assessee's contention that the impugned additions are made by the assessing officer based on the CTR which he has extracted from the application made before the settlement commission along with the nature of expenditure and the assessment year and therefore no addition can be made since the issue is settled HELD THAT - CIT(A) has not given any finding with regard to the assessee as to how the addition made in assessee's hands gets explained with regard to source from the settlement made by M/s. Indiabulls Financial Services Ltd more so when assessee is not an applicant. AO 's finding with regard to bank withdrawals recorded in the books of the assessee has also been not discussed by the CIT(A). As from order of the settlement commission we notice that the percentage of expenditure claimed by the applicants has been reduced from 90.32% to 65% and accordingly the amount to be settled is arrived at by the settlement commission. From this settlement whether the additions made based on specific list of expenses submitted before the settlement commission in the hands of the assessee is covered or not is not coming out clearly. In view of these discussions we are of the considered view that the issue should go back to the AO for a fresh examination and accordingly remit the issue to the assessing officer to verify whether the source for the additions made in the hands of the assessee is explained through the settlement made before the settlement commission. Assessee is directed to submit the relevant details before the assessing officer and cooperate with the proceedings. This ground of the revenue is allowed for statistical purposes.

Summary

Issues Involved:
1. Deletion of addition made under Section 69C by the CIT(A).
2. Deletion of disallowance of additional depreciation by the CIT(A).
3. Disallowance of ESOP expenses deleted by the CIT(A).

Summary:

1. Deletion of Addition Made Under Section 69C by the CIT(A):

The assessee, engaged in stock and share brokerage, was subjected to a search operation on 13/07/2016, leading to the issuance of a notice under Section 153A. The Assessing Officer (AO) made additions under Section 69C for unexplained expenditure and unaccounted receipts, which were contested by the assessee. The CIT(A) deleted these additions, referencing a similar case involving M/s Indiabulls Financial Services Ltd. The Tribunal noted that the additions were based on a Cash Transaction Record (CTR) seized during the search, which had already been addressed in settlement proceedings involving 16 entities of the Indiabulls group. The Tribunal remitted the issue back to the AO for fresh examination to verify if the additions were covered by the settlement, emphasizing that the AO must establish if the impugned additions were already accounted for in the settlement.

2. Deletion of Disallowance of Additional Depreciation by the CIT(A):

During the hearing, the Department's Representative did not present arguments regarding the deletion of disallowance of additional depreciation. Consequently, the Tribunal dismissed the grounds related to this issue as not pressed.

3. Disallowance of ESOP Expenses Deleted by the CIT(A):

Similarly, no arguments were presented by the Department's Representative concerning the deletion of ESOP expenses disallowance. The Tribunal dismissed the grounds related to this issue as not pressed.

Conclusion:

The Tribunal remitted the issue of addition under Section 69C back to the AO for fresh examination for all assessment years under consideration (2013-14, 2014-15, 2015-16, and 2017-18). The appeals concerning additional depreciation and ESOP expenses were dismissed as not pressed. The appeals were allowed for statistical purposes.